Why Customer Discovery Is Important Prior to SBIR

  • September 28, 2020

Preparation is often the key to success. Hence why we study for tests, prepare for meetings, and even read a recipe before making dinner. SBIR activities focus heavily on commercialization and marketing. It is not enough to have a brilliant product. SBIR applicants must have a strong skill set in marketing and commercialization. Reviewers will take this fact into account when determining who will be awarded. The time to do your homework regarding the business and commercialization component of your project is before you apply for SBIR funding.

Customer Discovery

Customer discovery is the foundation upon which the rest of your marketing plan will be built. When have a hypothesis about what your product offers and who would be interested in buying it’s time to test that hypothesis. Customer discovery prompts us to create such a hypothesis, then validate it using interviews with potential customers. The goal is how well the product meets customer needs and determine how many customers there could potentially be. This enables the team to determine if any changes need to be made to the product before developing a marketing plan.

Customer discovery should always preceed the creation of any marketing or commercialization plans. You need to know what you are selling to whom and why they want to buy it before you begin any marketing procedures. This is why customer discovery is key.

Iterative Process

The process of customer discovery is often iterative. This four-step process that encompasses hypothesis development, hypothesis testing, (good) questions, and evaluation and refinement. Many companies go through this process several times before they are comfortable with the outcomes. In step 3 you may interview potential customers only to find that you have overestimated the market need for this product, and that is ok. Simply go back to step 1 and 2 and work out a new hypothesis to test. Step 4 is the process of evaluating and refining. Many companies get to this step then repeat the previous 3 steps with the new and improved product. That’s ok too, the keyword here is discovery.

Pre-SBIR Activities

Customer discovery is one of the activities that should be completed before you apply for SBIR. The SBIR program is rigorous and there is often barely enough time to complete necessary project activities in the time frame allocated. There certainly will not be time for customer discovery. What’s more is that companies applying for SBIR will be expected to share their market validation, competition, customer pain point, and commercialization plans at the time they write the proposal. Customer discovery is not something you want to have to focus on during proposal preparation. It is for this reason that smart companies and entrepreneurs complete this process well in advance of the SBIR application.

In fact, that is the reasoning behind the creation of the I-Corps program which began with NSF in 2011. Now several agencies have adopted the program including NIH, DHS, USDA, DOD, and DOE. I-Corps is a program designed to help teams successfully complete customer discovery. It is helpful for the teams to have guidance when completing customer discovery and participation in the program illustrates to SBIR reviewers that you have cultivated the commercialization skills necessary to sell a product, not just develop a great idea.

If you plan on applying for SBIR, customer discovery is a must. I-Corps is a helpful way to complete the process.

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